Alan D. Morrison and William J. Wilhelm Jr.
- Published in print:
- 2007
- Published Online:
- May 2007
- ISBN:
- 9780199296576
- eISBN:
- 9780191712036
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199296576.003.0006
- Subject:
- Economics and Finance, Financial Economics
The second half of the 19th century saw the high water mark for laissez-faire capitalism. Business people, politicians, and jurists were largely agreed that economic progress was best accomplished in ...
More
The second half of the 19th century saw the high water mark for laissez-faire capitalism. Business people, politicians, and jurists were largely agreed that economic progress was best accomplished in free markets, supported by a minimal state. In this environment, investment banks were extremely important: they levered their reputations and their relationships to create the private laws that were needed to support large-scale financial capitalism. Technological advances forced the merchant banks mentioned in Chapter 5 to specialize in investment banking. This chapter discusses the role of the largest investment banks, and in particular of Kuhn Loeb and JP Morgan, in shaping modern corporate America. The investment banks invested investor activism, and they created the modern investment bank syndicate. In particular, their activist work with financially distressed corporations resulted in the development the ‘equity receivership’, the first coherent corporate bankruptcy law.Less
The second half of the 19th century saw the high water mark for laissez-faire capitalism. Business people, politicians, and jurists were largely agreed that economic progress was best accomplished in free markets, supported by a minimal state. In this environment, investment banks were extremely important: they levered their reputations and their relationships to create the private laws that were needed to support large-scale financial capitalism. Technological advances forced the merchant banks mentioned in Chapter 5 to specialize in investment banking. This chapter discusses the role of the largest investment banks, and in particular of Kuhn Loeb and JP Morgan, in shaping modern corporate America. The investment banks invested investor activism, and they created the modern investment bank syndicate. In particular, their activist work with financially distressed corporations resulted in the development the ‘equity receivership’, the first coherent corporate bankruptcy law.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- book
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.001.0001
- Subject:
- Business and Management, Business History
The two most powerful men in the nation’s dominant industry, Edward H. Harriman and James J. Hill, got into a fight in 1901 for control of the nation’s western railroads. The battle also pitted the ...
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The two most powerful men in the nation’s dominant industry, Edward H. Harriman and James J. Hill, got into a fight in 1901 for control of the nation’s western railroads. The battle also pitted the Rockefellers versus J. P. Morgan, “Big Oil versus Big Steel,” and the nation’s two largest banks, First National and City National. The two sides fought over a government-chartered northern “transcontinental” railroad that became the key to control of Chicago and Pacific trade with emerging markets in Asia. In the span of only seventeen hours in four days in May 1901 its stock rocketed from $110 a share to $1,000, the result of an inadvertent “corner” in its shares by the opposing forces. It resulted in a calamity for the “shorts” before a compromise was reached, the near collapse of Wall Street, the most precipitous decline ever in American stock values, and the fastest recovery. The stalemate led to the creation of a holding company, briefly the largest railroad combine in American history, which the U.S. Supreme Court narrowly declared unconstitutional. The ruling launched the reputations of Justice Oliver Wendell Holmes as the “great dissenter” and President Theodore Roosevelt as the “trust buster.” The court ruling energized the so-called “progressive’ movement, strengthened enforcement of the Sherman Act as the “first effort to control the economy at large,” and led to stifling government regulation that crippled America’s railroads for seven decades.Less
The two most powerful men in the nation’s dominant industry, Edward H. Harriman and James J. Hill, got into a fight in 1901 for control of the nation’s western railroads. The battle also pitted the Rockefellers versus J. P. Morgan, “Big Oil versus Big Steel,” and the nation’s two largest banks, First National and City National. The two sides fought over a government-chartered northern “transcontinental” railroad that became the key to control of Chicago and Pacific trade with emerging markets in Asia. In the span of only seventeen hours in four days in May 1901 its stock rocketed from $110 a share to $1,000, the result of an inadvertent “corner” in its shares by the opposing forces. It resulted in a calamity for the “shorts” before a compromise was reached, the near collapse of Wall Street, the most precipitous decline ever in American stock values, and the fastest recovery. The stalemate led to the creation of a holding company, briefly the largest railroad combine in American history, which the U.S. Supreme Court narrowly declared unconstitutional. The ruling launched the reputations of Justice Oliver Wendell Holmes as the “great dissenter” and President Theodore Roosevelt as the “trust buster.” The court ruling energized the so-called “progressive’ movement, strengthened enforcement of the Sherman Act as the “first effort to control the economy at large,” and led to stifling government regulation that crippled America’s railroads for seven decades.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0011
- Subject:
- Business and Management, Business History
Morgan returns from Europe to broker compromise. Vice President Roosevelt gives “big stick” speech at Minnesota State Fair and becomes President two weeks later after KcKinley is murdered in Buffalo.
Morgan returns from Europe to broker compromise. Vice President Roosevelt gives “big stick” speech at Minnesota State Fair and becomes President two weeks later after KcKinley is murdered in Buffalo.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0002
- Subject:
- Business and Management, Business History
Scene setters for April 3, 1901: New York Stock Exchange, profiles of J.P. Morgan and James J. Hill on the day Morgan departs for Europe.
Scene setters for April 3, 1901: New York Stock Exchange, profiles of J.P. Morgan and James J. Hill on the day Morgan departs for Europe.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0012
- Subject:
- Business and Management, Business History
Roosevelt profile, Morgan announces creation of Northern Securities to house controlling shares of Great Northern and Northern Pacific and prevent future Harriman raids on the Northern Pacific. ...
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Roosevelt profile, Morgan announces creation of Northern Securities to house controlling shares of Great Northern and Northern Pacific and prevent future Harriman raids on the Northern Pacific. Roosevelt gives his first a message to Congress and threatens government supervision of large corporations, using Northern Pacific panic as springboard.Less
Roosevelt profile, Morgan announces creation of Northern Securities to house controlling shares of Great Northern and Northern Pacific and prevent future Harriman raids on the Northern Pacific. Roosevelt gives his first a message to Congress and threatens government supervision of large corporations, using Northern Pacific panic as springboard.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0006
- Subject:
- Business and Management, Business History
Harriman-Schiff-Stillman-Rockefeller plot to seize control of the Northern Pacific, which Hill-Morgan control and in which they would house the Burlington (which threatens Harriman’s Union Pacific ...
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Harriman-Schiff-Stillman-Rockefeller plot to seize control of the Northern Pacific, which Hill-Morgan control and in which they would house the Burlington (which threatens Harriman’s Union Pacific traffic in Illinois, Iowa, Nebraska); Harriman-Schiff confront Hill and threaten him with “you will have to take the consequences”; Hill departs for Saint Paul-Seattle tour of Great Northern with investors.Less
Harriman-Schiff-Stillman-Rockefeller plot to seize control of the Northern Pacific, which Hill-Morgan control and in which they would house the Burlington (which threatens Harriman’s Union Pacific traffic in Illinois, Iowa, Nebraska); Harriman-Schiff confront Hill and threaten him with “you will have to take the consequences”; Hill departs for Saint Paul-Seattle tour of Great Northern with investors.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0010
- Subject:
- Business and Management, Business History
Northern Pacific common rises to $1,000 a share May 9, 1901, Hill-Morgan and Harriman-Schiff agree to $150 a share settlement price for the common to relieve the squeeze on the shorts. The market’s ...
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Northern Pacific common rises to $1,000 a share May 9, 1901, Hill-Morgan and Harriman-Schiff agree to $150 a share settlement price for the common to relieve the squeeze on the shorts. The market’s winners and the losers.Less
Northern Pacific common rises to $1,000 a share May 9, 1901, Hill-Morgan and Harriman-Schiff agree to $150 a share settlement price for the common to relieve the squeeze on the shorts. The market’s winners and the losers.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0013
- Subject:
- Business and Management, Business History
U.S. sues to break up Northern Securities as violation of Sherman Act prohibiting restraint of trade. U.S. Circuit Court rules uaninmously against Northern Securities. Hill-Morgan appeal to U.S. ...
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U.S. sues to break up Northern Securities as violation of Sherman Act prohibiting restraint of trade. U.S. Circuit Court rules uaninmously against Northern Securities. Hill-Morgan appeal to U.S. Supreme Court.Less
U.S. sues to break up Northern Securities as violation of Sherman Act prohibiting restraint of trade. U.S. Circuit Court rules uaninmously against Northern Securities. Hill-Morgan appeal to U.S. Supreme Court.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0003
- Subject:
- Business and Management, Business History
Profiles of Edward H. Harriman and Jacob H. Schiff and their world on April 3, 1901.
Profiles of Edward H. Harriman and Jacob H. Schiff and their world on April 3, 1901.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0004
- Subject:
- Business and Management, Business History
Story of the Chicago, Burlington & Quincy – initial target of both Harriman and Hill; the rise of “community of interest” interlocking ownership conversations of major railroads to eliminate wasteful ...
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Story of the Chicago, Burlington & Quincy – initial target of both Harriman and Hill; the rise of “community of interest” interlocking ownership conversations of major railroads to eliminate wasteful over-building and rate-cutting; failure of Harriman-Schiff to buy enough shares of the Burlington on open market to influence its management; Morgan-Hill fail to buy the “Saint Paul.”Less
Story of the Chicago, Burlington & Quincy – initial target of both Harriman and Hill; the rise of “community of interest” interlocking ownership conversations of major railroads to eliminate wasteful over-building and rate-cutting; failure of Harriman-Schiff to buy enough shares of the Burlington on open market to influence its management; Morgan-Hill fail to buy the “Saint Paul.”
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0009
- Subject:
- Business and Management, Business History
Schiff over-rules Harriman’s order to buy 40,000 more Northern Pacific common. Morgan from Aix approves buying 150,000 more Northern Pacific common at market open Monday, May 6. By Tuesday, May 7 the ...
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Schiff over-rules Harriman’s order to buy 40,000 more Northern Pacific common. Morgan from Aix approves buying 150,000 more Northern Pacific common at market open Monday, May 6. By Tuesday, May 7 the stock of Northern Pacific has been “cornered” by Hill-Morgan and Harriman-Schiff..Less
Schiff over-rules Harriman’s order to buy 40,000 more Northern Pacific common. Morgan from Aix approves buying 150,000 more Northern Pacific common at market open Monday, May 6. By Tuesday, May 7 the stock of Northern Pacific has been “cornered” by Hill-Morgan and Harriman-Schiff..
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0005
- Subject:
- Business and Management, Business History
Morgan-Hill shift their focus to the Burlington, whose stock begins a rapid rise; Morgan announces the creation of U.S. Steel.
Morgan-Hill shift their focus to the Burlington, whose stock begins a rapid rise; Morgan announces the creation of U.S. Steel.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0007
- Subject:
- Business and Management, Business History
Hill decides to go to New York, concerned, among other things in Morgan’s absence, about the rising daily share volume of Northern Pacific common. Morgan departs Paris for Aix-les-Bain. Description ...
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Hill decides to go to New York, concerned, among other things in Morgan’s absence, about the rising daily share volume of Northern Pacific common. Morgan departs Paris for Aix-les-Bain. Description of “uptown Wall Street” and the growing American wealth it attracted at the Waldorf Astoria; description of “ticker fever” and small, retail investors gone “stock mad.”Less
Hill decides to go to New York, concerned, among other things in Morgan’s absence, about the rising daily share volume of Northern Pacific common. Morgan departs Paris for Aix-les-Bain. Description of “uptown Wall Street” and the growing American wealth it attracted at the Waldorf Astoria; description of “ticker fever” and small, retail investors gone “stock mad.”
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0008
- Subject:
- Business and Management, Business History
Schiff confronts Hill and tells him Harriman syndicate has purchased majority control of the common and preferred shares of Northern Pacific.
Schiff confronts Hill and tells him Harriman syndicate has purchased majority control of the common and preferred shares of Northern Pacific.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0014
- Subject:
- Business and Management, Business History
U.S. Supreme Court rules 5-4 against Northern Securities, Hill-Morgan return Great Northern and Northern Pacific shares pro rata to original shareholders.
U.S. Supreme Court rules 5-4 against Northern Securities, Hill-Morgan return Great Northern and Northern Pacific shares pro rata to original shareholders.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0015
- Subject:
- Business and Management, Business History
Seven decades of stifling government railroad regulation and government subsidization of commercial aviation, trucking, and inland water transport. 1970 Supreme Court rules unanimously to allow Great ...
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Seven decades of stifling government railroad regulation and government subsidization of commercial aviation, trucking, and inland water transport. 1970 Supreme Court rules unanimously to allow Great Northern, Northern Pacific and Burlington to merge, thereby overturning the 1904 5-4 decision against merger. Railroads become the last major U.S. transport industry to be deregulated. Warren Buffett’s Berkshire Hathaway buys BNSF, the Hill legacy lines. American railroad freight system remains the world’s most successful such system and is the only entirely private run system in the world.Less
Seven decades of stifling government railroad regulation and government subsidization of commercial aviation, trucking, and inland water transport. 1970 Supreme Court rules unanimously to allow Great Northern, Northern Pacific and Burlington to merge, thereby overturning the 1904 5-4 decision against merger. Railroads become the last major U.S. transport industry to be deregulated. Warren Buffett’s Berkshire Hathaway buys BNSF, the Hill legacy lines. American railroad freight system remains the world’s most successful such system and is the only entirely private run system in the world.
Larry Haeg
- Published in print:
- 2013
- Published Online:
- August 2015
- ISBN:
- 9780816683642
- eISBN:
- 9781452949208
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816683642.003.0001
- Subject:
- Business and Management, Business History
How the Northern Pacific panic and corner differed from stock market panics during the previous one hundred years. Summary of the dominance of railroads in American life.
How the Northern Pacific panic and corner differed from stock market panics during the previous one hundred years. Summary of the dominance of railroads in American life.
